Japan - social security agreement

What's New?

The Government has agreed to finalise a Social Security Agreement with Japan. This measure will provide improved access to Age Pension for people who spend part of their adult lives in both Australia and Japan. It will allow people who live in either country to claim their entitlement to pension payments in both countries, and ensure that they can continue to receive their entitlements, whether they reside in Australia or Japan.

The Agreement will also facilitate business between Australia and Japan by removing the requirement for compulsory contributions to be paid into both countries' superannuation/pension systems in respect of temporarily seconded workers.

Background

Australia currently has 17 bilateral social security agreements in operation. Agreement payments included, these countries pay a total of about $600 million per year in pensions into Australia, while Australia pays a total of about $240 million per year into those countries.

The Agreement with Japan, like other recent agreements, will provide for coordination of pension entitlements. This means that Australia and Japan will share the financial responsibility for people of retirement age who have lived in both countries. Each country will pay a proportion of their pension, based on the length of a person's connection to that country's social security system.

The Agreement will also provide for regulation of 'coverage' arrangements. This affects employees who are sent from one country to work temporarily in the other. It means that superannuation/pension contributions will generally need to be made only to the scheme of the employee's home country, rather than to both countries' schemes.